When planning for the future, one of the most essential legal documents you can have is a Power of Attorney (POA). Whether you’re preparing for your peace of mind or helping an aging loved one, understanding how a POA works—and what can go wrong without one—is critical. Here are five key facts about Powers of Attorney that everyone should know.
1. What is a Power of Attorney?
At its core, a Power of Attorney allows someone you trust—called your “agent”—to step into your shoes and act on your behalf financially. Think of it as giving someone the legal authority to be “you” when handling your money, property, and other financial affairs.
A POA can be as broad or as narrow as you want. For example, you could grant someone the ability to manage all your financial matters, or limit their authority to a single transaction, like selling a home. This flexibility makes the POA a powerful tool—but only if it’s appropriately drafted and tailored to your needs.
2. What are the different types of Power of Attorney?
Not all POAs are created equal. There are three main types you should be aware of:
- General Power of Attorney – This grants wide-ranging authority but becomes invalid if you become incapacitated. It’s often used temporarily, like when someone travels overseas.
- Durable Power of Attorney – This type remains effective even if you become incapacitated, making it the most commonly used form in elder law planning.
- Springing Power of Attorney – This only becomes effective after being declared incapacitated. While it may sound appealing, proving someone’s incapacity can be difficult and time-consuming. Most elder law attorneys prefer durable POAs—they’re simpler and more reliable when time matters most.
3. When Does a Power of Attorney Become Effective?
Many people don’t realize that a POA only becomes effective when both the principal (the person creating the POA) and the agent sign the document in front of a notary. However, these signatures don’t have to happen at the same time.
For example, the principal could sign the POA today, and the agent could sign it 20 years later—and it would become legally effective on that later date. This flexibility allows you to prepare the document in advance, even if the agent doesn’t need to act immediately.
4. What Happens to a Power of Attorney After Death?
A Power of Attorney ends at the moment of the principal’s death. At that point, the agent’s authority ceases entirely. From there, control of the deceased person’s assets is determined by their will, trust, or beneficiary designations, not the POA.
This distinction is important: Many people mistakenly believe that a POA allows them to manage affairs even after someone has passed away. It does not. That’s why comprehensive estate planning involves both POAs and a clear plan for what happens after death.
5. Common Mistakes We See with Powers of Attorney
One of the most common and costly mistakes is using outdated or incorrect forms. The Power of Attorney laws in New York changed significantly on June 13, 2021, and many older documents—or do-it-yourself forms found online—are no longer valid under the current law.
Without a valid POA in place, your loved ones may be forced to go to court and file for Article 81 Guardianship, a legal proceeding that is time-consuming, intrusive, and expensive. Avoiding that process by having a valid, up-to-date POA that meets your unique needs is far better.
Bottom Line: Don’t Wait to Get It Right
A properly drafted Power of Attorney is more than just a piece of paper—it’s peace of mind. It ensures that someone you trust can step in and handle your affairs without delay or legal red tape if the unexpected happens. At Miller & Miller Law Group, we help clients create POAs that are customized, compliant with current law, and designed to protect your interests.
Don’t leave your future to chance or rely on outdated forms. Make sure your Power of Attorney is done right—because your family’s security may one day depend on it.
Contact us today to get started. Be sure to mention this article during your consultation so we can focus on your specific concerns and guide you with personalized advice.
This article is a service of Miller & Miller Law Group. We do not just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love.
